Amendments to Rhode Island run-off bill opens $100bn market

New amendments to Rhode Island’s Voluntary Restructuring of Solvent Insurers Law and the Rhode Island Protected Cell Companies Act will make run-off transactions easier to execute, and will open the door to a $100 billion market in US transactions via books of legacy business, according to consultancy firm Pro Global.

Rhode Island’s Voluntary Restructuring of Solvent Insurers Law will allow insurers and reinsurers to cede run-off commercial books with court-sanctioned finality in a similar fashion to a Part VII of the UK's Financial Services and Markets Act in the UK, according to Pro Global.

“The changes that have been passed will now strengthen the existing regulation by reducing potential ambiguities in how the law is applied,” said Mory Katz, managing director of US, at Pro Global.

“The amendments to the Voluntary Restructuring of Solvent Insurers Law and Protected Cell Companies Act show there is a real willingness in government, not just business, to make the law work. There is a consensus that it’s good for the industry and good for the State,” Katz added.

“This establishes Rhode Island as a centre of excellence for the US run-off sector. Rhode Island is being talked about at conferences all over the country and dozens of large insurers have waited for these changes to be enacted. There will be job creation for all sorts of insurance professionals - actuaries, accountants and lawyers.”

The legislation is expected to provide opportunities to the industry, improve the efficiency of business and drive job creation in Rhode Island and across the state.

In March 2017 ProTucket Insurance Company, a subsidiary of Pro Global, has become the  first Rhode Island domestic insurer expressly created to provide run-off portfolio transfer solutions under Rhode Island’s Voluntary Restructuring of Solvent Insurers Law.

“ProTucket expects to file the first insurance business transfer plan within the next 12 months” Katz noted.

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